Yes, their sound designer Paul Weir did a GDC talk on the sound engine that they built for the game. It included things like procedural riffs on an existing non-procedural soundtrack, advanced spatial SFX, and had a demo of the engine in action.

Edit: here's the talk: https://www.youtube.com/watch?v=zKJ_XuQjjiw

And Monkey Island 2—though that wasn’t generated, it was just a large pile of musical glue that let the music flow from one area to the next.

We did a similar thing with System Shock 2 for ambient sounds/music. We had zone triggers which fed into a DSL for queuing up/randomizing/looping audio segments. I built the runtime on top of an existing virtual-machine style audio playback system which had been developed for flight sims, where it was used to stitch together voices for ground control. I was a fairly junior dev at the time, and IIRC I was not able to implement the requested cross-fading feature in time to ship. Fortunately, the silence between tracks worked pretty well with the desired atmospheric effect.